Sustainability takeaways from #SIM2022

It was great to be in Brussels at #SIM2022, discussing the role of technology in sustainability transformation (SX). Alongside the broader topic of decarbonization of heavy industry and the path to net zero, more specific conversations around green hydrogen, carbon capture, the circular economy, and legislation were covered across heavy industries such as cement, metals, and glass.

Here are some of my takeaways from the event:

• We’re still very much at the start of the journey (and already falling behind in terms of ability to meet 2050 targets), with a lot of significant challenges ahead. However, technology is not the bottleneck, with solutions already available to help customers address challenges of emissions, waste etc. Some leading players in hard-to-abate emissions industries such as cement, metals, chemicals, and glass industries etc. are aggressively forging a path to tackle the problems.
• Big challenges and questions include: can sustainability be profitable; how to embed cultural and organizational change; and the role and roll-out of regulations and standards across the different manufacturing sectors that balance maintaining a competitive market whilst eliminating (or at least reducing) the loopholes that facilitate greenwashing.
• The two overarching topics that resonated were around decarbonization and circular supply chains:
  • As an extension of discussions on circular economy, we heard more about “Industry symbiosis” and “industry clusters,” where waste materials can be reintroduced to new product lifecycles in local businesses (with minimal transportation) operating in different industry sectors.
  • Industry clusters can create the needed critical mass to make access to technologies such as carbon capture and storage solutions (CCS) more economically viable, especially for small to medium size companies.
• The data challenge is still significant, especially as companies look to extend beyond basic monitoring (e.g., energy meter monitoring overall consumption) for visualisation (e.g., understanding where the inefficiencies in their process lie), and leveraging data for optimization of processes. More sensing is necessary to be able to provide greater granularity of data down from plant-level to process, line, or asset level insight. In many companies, data isn’t tagged (or is incorrectly tagged) so it lacks contextualisation. The variety of functions available in solutions, such as within energy management systems, can’t be accessed until these basics are in place.
• These challenges are not just internal but extend across the product lifecycle, and even as it extends into second life products. This requires secure data exchange and traceability across for industrial supply chains as companies face growing requirements to consider both their scope-three emissions, and a product’s carbon footprint (PCF).
• Another significant focus was on the role and evolution of regulations, the challenges in implementing a standardized approach and the impact on multi-national competition. The European Union has taken the lead with EU-#CBAM (Carbon Border Adjustment Mechanism), an extension of the EU #ETS; however, this was recently delayed in the EU parliament. Sentiment from some of the speakers at the event was that this wasn’t entirely bad and would support more far-reaching measures in a final version.
• At the crux of all of these discussions is the simple question—is sustainability profitable? Yes, no, and yes!

• Yes - Digital transformation can already provide tools to optimize processes and minimize inefficiencies across multiple business functions (design, operations, maintenance, supply chain) that can both provide an immediate RoI whilst improving sustainability.
• No - Some of the changes needed to meet corporate pledges and commitments e.g., in changing of processes or use of new materials etc. may require investment that doesn’t have an immediate payback.

• Yes – however, the cost of not doing something should not be ignored. With the combination of stakeholder pressure, the evolution of regulations (including the ever-rising EU carbon price), as well as pressure to meet targets aligned to major corporations decarbonizing their supply chain, companies not starting their SX journey will find themselves in a precarious position in the future.